Portland General Electric Corp. (PGE) has slashed its operating costs, increased its capital expenditures and redirected its operations to respond to the coronavirus pandemic, and that is likely to continue for the rest of this year.
CEO Maria Pope and CFO Jim Lobdell underscored all of this on Friday during a 2Q2020 earnings conference call reporting “solid results.” A combination of favorable hydro supplies, good wind conditions, and lowering operating costs offset the Covid-19 impacts.
“As an essential provider, we will continue working to keep costs low to support economic recovery and the communities we serve in this unprecedented time,” Pope said. “The second half of this year remains a challenge with retail deliveries and power market margins likely to be negatively impacted. Our outlook for the balance of 2020 remains cautious.”
More quarterly earnings coverage by NGI may be found here.
Covid-19’s impact on the economy in and around Portland is reflected in Oregon’s unemployment rates, which were 3% before the pandemic, 14% in April, and now more than 11%.
Energy usage impact is centered on the commercial use, which dropped 16% in the second quarter while residential (7%) and industrial (3%) both increased in 2Q2020, Pope said.
“One of the things we have moved very aggressively on is cost reduction,” Pope said. “We also raised our capital spending [$190 million this year; $165 million in 2021].
“As an essential service provider during these extraordinary times, delivering reliable power services is our highest priority and in that regard, we need to ensure the continuity of our generation fleet is essential.”
Pope said PGE’s employees have stepped up during the pandemic. More than 2,000 employees are working from home, and still using the time to focus on cost structure, accelerate the use of more technology and simplifying processes.
For 2Q2020, PGE reported net income of $39 million (43 cents/share), compared with $25 million (28 cents) for the same period last year.
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